Former Volvo directors oppose Chinese sale
Published: 12 Dec 2009 08:49 GMT+01:00
Updated: 12 Dec 2009 08:49 GMT+01:00
- Volvo suitor Geely resumes trading (08 Dec 09)
- Jakob group 'ready to bid' for Volvo Cars (07 Dec 09)
- Crown rolls out new bid for Volvo Cars (03 Dec 09)
In the letter, the former directors implored Ford not to rush into selling Volvo Cars to Zhejiang Geely Holding Group without properly analyzing Volvo Cars' future, now that there are signs that the market and profitability are improving. The former directors believe that Geely is not a suitable owner of Volvo.
"It is a small company, which lacks the technical competence that is necessary to develop Volvo Cars," a source told Dagens Industri. Other misgivings expressed by the authors of the letter are that the technology could be leaked, and that Geely lacks experience outside China.
Earlier reports said US auto giant Ford picked Zhejiang Geely Holding Group in October as its preferred bidder for money-losing Volvo, which is based in Sweden. Geely subsidiary, Geely Automobile Holdings, has confirmed that it would be interested in acquiring the Chinese operations of Volvo if its parent company is successful in acquiring the troubled carmaker.
Among the authors of the letter are Sören Gyll and Gunnar L Johansson, both former managing directors and operations managers of Volvo. Three of the signatories are active in the current bidding process for Volvo, including Gyll, who is an adviser to rival bidder, the Jakob consortium.
According to Dagens Industri’s source, the former directors have stepped back from their other competing roles to appeal to Ford not to sell Volvo to Zhejiang Geely.
Volvo Cars' management has reacted strongly to the swirling debate around the Chinese automaker Geely, claiming that it borders on xenophobia. In response, managing director Stephen Odell and HR director Björn Sällström have written a letter to all Volvo employees about management’s attitude towards the company that may become Volvo Cars' new owner.
"It comes close to xenophobic undertones," Sällström told the newspaper Göteborgs-Posten. In the letter to employees, the directors wrote that "commentators represent both external and internal opinion, and give Volvo Cars and the brand a negative ring."
"We are working globally and exclude no one," Sällström told the paper.
Meanwhile, the potential sale of Volvo PV to Geely has attracted strong criticism from the Christian Democrats, who fear a communist takeover of the iconic brand. A number of Christian Democrat politicians in the Swedish parliament have written in a debate article in Göteborgs-Posten that it is "deplorable how certain politicians, union representatives, media and others embrace Chinese Geely as a potential purchaser."
According to the article’s authors, in reality it is not Geely that will purchase Volvo, but rather the Communist Party and the Chinese state.
“The metal workers unions in Gothenburg have for decades tried to prevent the communists from moving into the company. But now it seems they are sitting back to let in worse communists than the Swedish have ever been in practice,” wrote, among others, Swedish parliamentarians Annelie Enochsson, Ingemar Vänerlöv, Holger Gustafsson and Else-Marie Lindgren.